Today E-commerce has achieved heights that nobody could have imagined when the idea materialized initially. With e-commerce businesses offering a range of products from buttons to personal planes, these ‘giants’ are raking in millions and billions of turnovers. While starting a start-up is no joke and involves ‘risks’, it is pertinent to note how intellectual property (IP) infringement has seeped its way into this field as well. Every business venture or e-commerce entity requires business plans, marketing strategies, effective PR & Advertising skills, amongst others in order to establish itself in the minds of consumers and general public.
A unique and/or distinctive name, powerful or creative enough to impact the mind of possible customers is the lifeline of any business growth. This is where trademarks come into picture wherein garnering a ‘trademark’ protection not only prevents others from riding on another’s name via word mark, device mark, sound mark, design or expression, but helps in distinguishing one’s brand/products/services from that of others enabling a healthy market competition.
Recently a Mumbai based consultancy, Redstone Consultancy, promoter of another delivery application ‘Groffr’ (hereinafter, the plaintiffs) dragged Grofers (hereinafter, the defendants) to the High Court of Delhi alleging passing off by the latter.[i]The plaintiffs contented that the defendants were using a similar sounding/confusingly similar name in order to cloud consumers and consumer decisions leading to unfair competition in the market.
The plaintiffs are primarily engaged in the business of real estate but also claim to be in the business of selling electronic goods, whereas the defendants, Grofers, is the popular online grocery delivery application that connects its consumers with local groceries in their vicinity. Aged barely two years old, Grofers has achieved a ‘cult status’ amongst fellow e-commerce giants since then, giving a cutthroat competition to other apps providing similar services. The dispute in question is pertaining to the usage of the trademark ‘GROFFR’ of the plaintiff and ‘GROFERS’ of the defendants.
While the suit is still in initial stages, the Hon’ble Delhi High Court has ordered the disputing parties to provide a proper disclaimer to consumers on their websites and/or mobile applications, informing that neither is related or associated with the other and is individually involved in their respective businesses. The Court has ordered the parties to comply with this order and further litigation in this matter would be dealt with in early 2016.
This case again brings into picture the main person involved in this scenario – the consumer. The case will be looked at from the perspective of a consumer taking into consideration the point of view of an individual having average intelligence and imperfect recollection. The next point to be ascertained is whether the structural and/or phonetic similarity of the two marks ‘Grofers’ and ‘Groffr’ in the present case are likely to deceive or cause confusion to such consumer. Furthermore for a strong passing off case to survive, it is important to prove that the use of mark by the defendant is calculated to mislead and deceive its customers into believing that its products originates from plaintiff’s and/or its extension/subsidiaries.[ii]
Although most e-commerce companies and online businesses swear by consumer acquisition and brand recalling as being important key factors for businesses to flourish, it is yet to be ascertained as to how this case would further shape up similar cases embroiled in passing off/infringement cases in the future.
[i]Redstone Consultancy Services Pvt. Ltd. vs. Grofers India Private Ltd. &Anr., CS(OS) 3344/2015, High Court of Delhi, Nov. 6, 2015.
[ii]See,Cadila Healthcare Limited vs Cadila Pharmaceuticals Limited,  2 SCR 743; Also see, Mex Switchgears Pvt. Ltd. vs Max Switchgears Pvt. Ltd., 2014 (58) PTC 136 (Del).